1. Suppose the loss ratio on a line of property insurance is 76 percent, the expense is 25 percent, the dividend ratio is 2 percent, and the investment yield is 7 percent. How profitable is this line?
2. An insurance companyâs projected loss ratio is 80 percent, its loss adjustment expense ratio is 18 percent, and the dividend ratio is 3 percent. What is the minimum investment yield the company requires to earn a 4% profit?
1. Suppose the loss ratio on a line of property insurance is 76 percent, the expense is 25 percent, the dividend ratio is 2 percent, and the investment yield is 7 percent. How profitable is this line?
2. An insurance companyâs projected loss ratio is 80 percent, its loss adjustment expense ratio is 18 percent, and the dividend ratio is 3 percent. What is the minimum investment yield the company requires to earn a 4% profit?
For unlimited access to Homework Help, a Homework+ subscription is required.
Related questions
1. The 2014 balance sheet of Sugarpovaâs Tennis Shop, Inc., showed long-term debt of $5.5 million, and the 2015 balance sheet showed long-term debt of $5.9 million. The 2015 income statement showed an interest expense of $135,000. What was the firmâs cash flow to creditors during 2015? 2. Billyâs Exterminators, Inc., has sales of $746,000, costs of $300,000, depreciation expense of $52,000, interest expense of $36,000, and a tax rate of 35 percent. What is the net income for this firm?
|